Tuesday, March 3, 2009

The economy, what else?

It seems to me that the government is using an indirect approach to fix our ailing economy. If the infusions of cash to failing banks and lending institutions do make it possible for them to lend money, then to whom do they lend it? Businesses that have no business? Retailers who have no customers? If the consumer stops consuming, everything grinds to a halt, credit or no credit.

Maybe consumers could be given a percentage off of certain retail purchases for say, a year. They could submit sales receipts (automated at the register) to the federal government who would immediately reimburse consumers directly, instead of giving the trillions to the businesses who have been so badly run in the first place.

This direct action will have immediate effects, would quickly stimulate business activity and unstick the economy. For example, the total retail and food services expenditures (excluding autos and parts) in 2006 was $3.9 Trillion dollars. An instant 10% rebate would cost about $390 Billion. Sounds like a better option than giving $390 Billion to AIG, GM, Bank America.

Maybe its just me.